Ryanair’s aggressive pursuit of Irish rival Aer Lingus remains something of a mystery even as the budget airline reveals a ‘revolutionary’ package of remedies in its latest bid to win over the EU watchdog.

The European Commission is is reviewing Ryanair’s €694 million euro ($906 million) bid for Aer Lingus — Ryanair’s third takeover attempt — and has set a Feb. 6 deadline for its decision.

Reporting a 10% jump in first-half profits on Monday, CEO Michael O’Leary said he had obtained agreements from six airlines to set up new bases in Ireland and/or enter specific routes with the result that all 42 “merger to monopoly routes.” would have ‘substantial airline competitors.’ Mr. O’Leary declined to identify the other airlines but said they were all ‘household names.’

Mr. O’Leary himself admits that any takeover of its rival would be a ‘small deal’ and just part of the airline’s expansion plans which makes his dogged, and expensive, pursuit even more difficult to understand.

The cynical view is that Ryanair simply wants to dominate its home Irish market and is taking out the competition while it can. Others say that it could use Aer Lingus’s seven-strong long haul aircraft fleet to jump-start a push into the trans-Atlantic market.

“Ryanair has said it would look at flying low cost long haul flights in the future and this would be a way of getting some experience, initially as a by-product,” said Gert Zonneveld, an analyst at Panmure Gordon.

Deutsche Lufthansa and Air France-KLM wowed investors with stronger-than-expected third-quarter results as their cost cutting efforts, involving thousands of planned layoffs, seem to be giving the airlines badly-needed extra lift.

But with both airlines warning of a tough fourth quarter particularly for their domestic operations—in Germany and France respectively—amid little economic growth in much of Europe, it is clear that the companies’ recovery is still in the early stages.

“Cost cutting is a fundamental necessity today and it has to be a permanant focus of attention not merely a temporary campaign,” said John Strickland from aviation consultants JLS Consulting.

“Fuel costs and economic conditions are outside of carriers’ control, but in many ways the challenge is the battle for hearts and minds of the staff as both Air France and Lufthansa have seen with recent strikes,” Mr. Strickland added.

The carriers have to continue with their cost cutting drives to achieve competitive cost levels on their large but loss making short-haul networks, he said. Such savings measures can be focused on the functional aspects of the business without damaging the key service elements these airlines seek to differentiate themselves, Mr. Strickland said.

The proposed tie-up between BAE Systems PLC and European Aeronautic Defence & Space Co. has shone a light on old-fashioned relationship building, with many mandates being awarded to advisers who lay claim to decades-long associations with the two giant corporates.

Advisory boutiques have also been big winners – with four independent advisory houses winning mandates, out of the seven advisers named on the tie-up.

The deal itself involves Airbus parent EADS and Britain’s BAE Systems carrying out a merger to create the world’s largest aerospace-and-defense company. The two companies confirmed they were in advanced talks Wednesday.

A merger bomb landed in the markets late Wednesday when European Aeronautic Defence & Space NV and BAE Systems plc announced they are exploring a tie-up. How far the shockwaves spread will depend on the deal structure and, to a lesser extent, Boeing Co.’s reaction.

According to Wednesday’s announcement “discussions between the parties envisage that BAE Systems shareholders would own 40% and EADS shareholders 60% respectively of the enlarged group.”

Enterprise values of 5.4x forward Ebitda for BAE and 4.7x for EADS – broadly in line with market consensus – suggests the split is fair.

Not quite, though. BAE has a dismal top-line growth trajectory, but profitability right across its P&L is more than double that of EADS. The U.K. company could push for a multiple that is 30% higher than EADS’ 4.7x, rather than the mere 15% difference presently under discussion.

The proposed deal between BAE Systems and European Aeronautic Defence & Space Co. has set off a wave of rating changes from leading equity analysts, who also point out that the deal could prompt a series of mergers in the industry.

BAE and EADS confirmed after the close of European markets Wednesday that they are in talks to create a combined company that would be the world’s largest aerospace and defense firm.

Many analysts have highlighted big hurdles to the potential tie-up, describing the deal as ambitious and complicated. Even ratings firm Fitch stepped in to say that the potential merger could be positive but it faces “significant obstacles” and the original proposal may have to be watered down.

For the second time this year, a major strike has hit Frankfurt airport, causing the flagship German carrier Deutsche Lufthansa AG to ground flights and rebook passengers. Friday is the third day over the past week Lufthansa cabin crew have walked off the job, and each successive strike has widened in scope: first Frankfurt, then Munich and Berlin too, and now at six airports across the country.

Lufthansa has cancelled about a thousand of its scheduled 1,800 flights Friday. For passengers, the strikes have thrown travel plans into disarray. “We’re being held hostage by the strikers, it’s not ok” said 43-year old Vallery Isoird from France, who has to fly home to France from Johannesburg via Geneva.

However not all the passengers blame the striking workers. “I think after three years with no pay increase it’s definitely justified for cabin to crew to now demand pay increases,” said businessman Jörg Posselt, 41, travelling back from the U.S.

The airport, Europe’s third-busiest, was calm on Friday, as Lufthansa had cancelled the majority of flights a day earlier. Since Lufthansa pre-warned of the strike by text message, email and social media, the usual scenes of strike-related chaos were absent at Frankfurt airport.

By 2050, self-organizing fleets of passenger jets catapulted into the sky on take-off and gliding into land at airports using robots powered by renewable energy will have transformed the aviation industry into a cleaner, more efficient, passenger-friendly business without sacrificing safety.

The aircraft maker is already working on the technology, new aircraft design and the development and use of alternative fuels to fulfill this dream. Airbus, a unit of European Aeronautic Defence & Space Co., says the industry will have to come up with new ideas like these.

But even Airbus officials recognize much of it is far-fetched, like slinging jets into the sky to save on fuel during take-off. Still, Airbus and its airport and airline partners and customers have a nearer term goal.

Already the world’s largest carrier by international passenger traffic, the global reach of Emirates was further extended Thursday, with the Gulf airline striking a 10-year partnership with Qantas Airways.

The deal will give the Middle East airline access to over 50 destinations in Australia, while struggling Qantas has a new best friend in the unlikely shape of its former enemy.

Lufthansa and German union UFO failed to reach a compromise on Aug. 16 in a dispute about wages, outsourcing and temporary workers. UFO has obtained member support for a strike in past weeks, and Friday last week called Lufthansa’s recent offer unacceptable.

Strikes are an especially sensitive issue for the German airline. Lufthansa’s shares fell to an intraday low of €9.76 Friday, ahead of UFO’s decision to hold off a strike, pending a revised offer. The shares were changing hands for €9.92 in early trading today.

“The tone from management was quite downbeat, particularly in relation to Spain and we would have concerns in the near term over demand and yield.”

Deutsche Lufthansa has stepped an already far-reaching cost-cutting program while Air France-KLM is pressing ahead with a similarly broad overhaul despite cost-cutting progress in the second quarter.

John Strickland who runs aviation consultancy JLS Consulting said the airlines face a long haul. He said:

“All legacy carriers are facing the challenges of high fuel prices, a sluggish European market and intense competition from low-cost carriers. But cost cutting alone will not overcome these challenges in the longer-term.

“Apart from cost cutting, the key questions that carriers need to address in response are how they can improve productivity and what new business models, particularly for short haul, could look like.”